Causes Of Economic Growth ✓ Solved

Causes Of Economic Growtharticle 1reza M Fan H Mohamued E 2

According to the article by Reza, M., Fan, H., and Mohamued, E. (2018), the impacts of technology and international trade have gained momentum in the 21st century, creating significant effects on the overall economic operations of countries. As competition rises on a global platform, it is vital to pursue economic development activities while lowering uncertain barriers and finding better ways to perform strategic business operations.

The economic growth of a country depends on several factors, with human capital and governmental monetary policies being primary influences. The role of exports and technology is paramount, significantly affecting the growth opportunities available to organizations. This article also discusses how technologies impact economic growth, maximizing performance to enhance profits and maintain competitiveness.

Economic integration, as explored by Magistretti, G., and Tabellini, M. (2018), can reduce trade barriers, helping governments to increase profits and improve fiscal and living standards. With the demand for democracy rising alongside economic integration, it is essential to address potential barriers and challenges in economic development activities. To foster a country’s economic growth and reduce major trade policy barriers, governments must focus on various potential challenges and mitigate vulnerabilities.

Furthermore, economic integration promotes cultural exchange and minimizes key concerns regarding growth and development activities. To reduce inequalities within society, governments must prioritize economic growth activities and minimize competitive barriers and challenges.

In their article, Acemoglu, D., Johnson, S., and Robinson, J. A. (2001) highlight that the process of economic development is characterized by prolonged stagnation followed by rapid takeoff, leading to desired revenue increases. There exists a substantial body of literature addressing the potential challenges faced by economies, guiding them toward growth options and long-term strategic revenues necessary for economic development. To fully grasp the economic development process, it is essential to understand its fundamental origins and minimize trade barriers that could impede progress.

The relationship between human capital and economic development is crucial, significantly contributing to overall success without adversely affecting the country’s economic standards.

According to Stone, C. (2017), economic growth is vital for fiscal stabilization and raising living standards, requiring government intervention to foster growth opportunities. With the challenges posed by the global pandemic, achieving economic growth over the next few years will be crucial, demanding time and effort.

Numerous benefits accompany economic growth, necessitating an understanding of the vital resources that could assist in addressing growth opportunities and overcoming significant barriers. The role of small businesses is particularly critical in grasping major economic growth aspects and other relevant areas. Faster growth in Gross Domestic Product (GDP) contributes significantly to the success of a country's economic operations and elevates living standards.

Bist, J., P., and Robert, R. (2018) concentrate on the long-term relationship between financial development and economic growth, suggesting various methods to enhance a country's financial operations while emphasizing international trade. This focus opens doors to new opportunities, minimizing barriers that could undermine stable business operations.

The positive repercussions of financial development directly correlate with economic growth, reducing competitive obstacles for countries. This article emphasizes the importance of policy development and tackling challenges that might hinder stable organizations and economic growth. Many countries identify various causes of economic growth, prioritizing options that maximize their revenues and profitability.

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The causes of economic growth are multifaceted, encompassing technological advancements, international trade, financial development, and human capital, among other factors. Understanding these causes is essential for formulating effective policies that promote sustainable economic growth.

A critical driver of economic growth is technology, which has revolutionized businesses and industries. As noted in the article by Reza et al. (2018), technology enhances productivity by allowing businesses to innovate and optimize operations. In the current global economy, the ability to adapt to technological changes and incorporate new technologies into business processes has become crucial for competitiveness. This is particularly significant for emerging economies, where technology can bridge gaps in productivity and output compared to developed countries.

Moreover, international trade is another pillar of economic growth. As highlighted by Magistretti and Tabellini (2018), reducing trade barriers facilitates the flow of goods and services across borders, thereby fostering economic integration. This integration not only opens up new markets for businesses but also encourages competition, which can lead to improved efficiency and lower prices for consumers. For instance, countries that engage in free trade agreements often experience economic growth due to an increase in exports, as they can better position themselves in the global market.

Equally important is the role of human capital in economic growth. A well-educated and skilled workforce is indispensable for enhancing productivity and fostering innovation. Acemoglu et al. (2001) emphasize that the origins of economic development often stem from investing in education and skills training. Countries that prioritize education and workforce development are typically better positioned to adapt to economic changes, thereby driving growth more effectively.

Financial development plays a significant role in facilitating economic growth by providing the necessary capital for investment. As Bist and Robert (2018) discuss, a stable financial system allows for better allocation of resources, which can spur business ventures and lead to economic expansion. In many low-income countries, improved access to financial services has proven to be a catalyst for growth, enabling entrepreneurs to start businesses that create jobs and income opportunities.

Addressing the inequalities brought about by economic growth is paramount for sustainable development. Stone (2017) notes that while economic growth can raise living standards, it can also exacerbate disparities if not managed carefully. Therefore, policies must be designed to ensure that the benefits of growth are equitably distributed across all segments of society.

To summarize, the causes of economic growth are interlinked and require a comprehensive approach that includes fostering technological innovation, promoting international trade, developing human capital, and ensuring financial stability. Policymakers must focus on these factors to achieve sustainable economic growth that benefits all citizens.

References

• Acemoglu, D., Johnson, S., & Robinson, J. A. (2001). The Colonial Origins of Comparative Development: An Empirical Investigation. American Economic Review, 91(5).
• Bist, J., P., & Robert, R. (2018). Financial development and economic growth: Evidence from a panel of 16 African and non-African low income countries. Journal of Economics and Finance, 6(1).
• Magistretti, G., & Tabellini, M. (2018). Economic Integration and Democracy: An Empirical Investigation. Journal of Business Research for Business Leaders.
• Reza, M., Fan, H., & Mohamued, E. (2018). Effects of export and technology on economic growth: Selected Emerging Asian Economies. Journal of Economic Research, 32(1).
• Stone, C. (2017). Economic Growth: Causes, Benefits, and Current Limits. Journal of Budget and Policy Priorities, 16(6).